How much is Arkansas sales tax on a vehicle?
Arkansas charges a 6.5% state sales/use tax on the full taxable price of a motor vehicle, plus applicable city and county sales/use taxes based on where you live; however, local city/county taxes for vehicle purchases are only applied to the first $2,500 of the vehicle’s price. Tax is generally calculated after subtracting any eligible trade-in value and is paid at registration with the Arkansas Department of Finance and Administration (DFA). Below is a detailed breakdown of how it works, what’s taxed, and examples to help you estimate what you’ll owe.
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What you pay in Arkansas
Arkansas assesses a 6.5% state sales/use tax on the taxable vehicle price. In addition, your home city and county sales/use taxes also apply, but the local portion is only applied to the first $2,500 of the vehicle’s price. You’ll pay these taxes when you title and register the vehicle with DFA.
The taxable price typically equals the purchase price minus any allowable trade-in credit. Dealer discounts reduce the taxable amount; manufacturer rebates usually do not reduce the taxable amount because the dealer receives reimbursement from the manufacturer. Documentation (doc) fees and other dealer-imposed charges are generally taxable, while government title, registration, and license fees are not.
Local tax cap explained
For motor vehicles registered in Arkansas, local city and county sales/use taxes are calculated only on the first $2,500 of the vehicle’s purchase price. This means the local tax portion is limited, even for expensive vehicles, while the 6.5% state tax applies to the full taxable price.
Example: If your city rate is 2% and your county rate is 1% (combined 3%), the local tax is 3% of $2,500 = $75, regardless of whether the vehicle costs $10,000 or $60,000. The state 6.5% applies to the full taxable amount.
What transactions are taxed
Arkansas taxes purchases of new and used vehicles, whether bought from a dealer or a private party. The prior exemption for low-priced used vehicles was eliminated in 2021, so most vehicle purchases are now taxable. Out-of-state purchases are subject to Arkansas use tax at the same rates when you register the vehicle in Arkansas, with credit typically allowed for legally paid sales/use tax to another state.
How and when to pay
You pay the tax at an Arkansas DFA Revenue Office when you title and register the vehicle, generally within 60 days of purchase. Waiting beyond the deadline can trigger penalties or interest. If you traded in a vehicle, bring proof of the trade-in to receive the credit; if you sold a previous vehicle close in time to the purchase, ask DFA about documentation for any available credit rules.
Key points at a glance
The following list summarizes the most important rules and definitions that affect how much tax you’ll owe on a vehicle purchase in Arkansas.
- State rate: 6.5% on the full taxable price.
- Local rates: City and county taxes apply based on your residence, but only to the first $2,500 of the vehicle’s price.
- Taxable amount: Typically the purchase price minus allowable trade-in credit; dealer discounts reduce the price, manufacturer rebates usually do not.
- Fees: Dealer doc and similar fees are generally taxable; government title, registration, and license fees are not.
- Who pays: Applies to dealer and private-party sales; out-of-state purchases are taxed upon Arkansas registration (credit may be given for tax paid to another state).
- When due: At registration with DFA, usually within 60 days of purchase.
Taken together, these points ensure you can estimate your total tax and prepare the right documents before you visit a DFA office to register your vehicle.
Example calculations
These examples illustrate how Arkansas vehicle sales/use tax is computed with the state rate and the local cap.
- $28,000 vehicle, $8,000 trade-in, city 2% + county 1%:
– Taxable price = $28,000 − $8,000 = $20,000
– State tax = 6.5% of $20,000 = $1,300
– Local tax = 3% of $2,500 (cap) = $75
– Total tax due = $1,375 - $12,000 private-party purchase, no trade-in, city 1.5% + county 1%:
– Taxable price = $12,000
– State tax = 6.5% of $12,000 = $780
– Local tax = 2.5% of $2,500 (cap) = $62.50
– Total tax due = $842.50
Your exact local tax rates depend on your home city and county. DFA’s rate lookup and local tax resources can confirm the rates that apply to your address.
What to bring to DFA
To make registration and tax payment smoother, prepare the documents DFA typically requires.
- Bill of Sale or dealer invoice showing purchase price and any trade-in.
- Title (signed over to you) or Manufacturer’s Certificate of Origin for new vehicles.
- Odometer disclosure (if applicable) and proof of insurance.
- Proof of any tax paid to another state (for out-of-state purchases).
- Government-issued ID and payment method for taxes and fees.
Having these items ready helps ensure your tax is calculated correctly and your registration is completed without delays.
Bottom line
Expect to pay 6.5% state tax on the full taxable vehicle price, plus local city and county taxes that apply only to the first $2,500 of the price. Subtract any allowable trade-in value before calculating tax, and plan to pay at registration with DFA. Because local rates vary, verify your exact city and county percentages before you buy.
How do I calculate the sales tax on my car in Arkansas?
When making a car purchase in Arkansas, you’ll pay 6.5% of the vehicle’s purchase price, whether you’re buying from a private seller or a car dealer. Arkansas tax law does not discriminate between the two. Unless you qualify for a sales tax exemption (discussed below), you have to pay tax on your vehicle purchase.
How to calculate sales tax on a new vehicle?
How Is Sales Tax Calculated On a Car? To calculate the amount of car sales tax due on a car purchase, multiply the car price by the state sales tax rate. There may be other factors involved in calculating the sales tax, including trade-ins, rebates, and local taxes.
What price do you not have to pay sales tax on a car in Arkansas?
$4,000
Sales and Use Tax on Sales of Motor Vehicles — Currently, a used motor vehicle costing less than $4,000 is exempt from sales or use tax, a used motor vehicle costing at least $4,000 but less than $10,000 is subject to a tax rate of 3.5%, and a used motor vehicle costing $10,000 or more is taxed at 6.5%.
How to avoid Arkansas sales tax on new vehicles?
Arkansas currently exempts sales tax on the sale of a new or used motor vehicle or trailer, if the total consideration for the sale of the new or used motor vehicle, trailer, or semitrailer is less than four thousand dollars ($4,000). Sales tax is calculated on the total amount of sale, less trade-in value.
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